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Veto the budget

Maine Democrats, trying to push through an incredibly flawed “compromise” budget through the Legislature, are chastising Gov. Paul LePage for not swiftly signing their bill.

They say he is trying to use time as leverage and play politics with the budget. If he is going to veto it, they say, do it now, so they can figure out what to do.

But nothing, and I do mean nothing, could ring more hollow.

This Legislature was sworn into office more than six months ago. LePage submitted his budget months ago.

In the interim, legislators have taken up meaningless bill after meaningless bill and sat on their hands and did nothing about any of the big issues (such as hospital debt), which would excuse their tardiness.

Unsurprisingly, the “compromise” budget that they are haphazardly pushing through doesn’t take the state’s fiscal situation seriously.

And why did the Democratic leaders in Augusta act this irresponsibly with the budget? Because they wanted to use time against the governor and force him to accept their compromise.

Make no mistake, this bill deserves extra scrutiny and probably should be vetoed.

Its first and most grave sin is that it fails to confront the structural problems of the Maine budget. It has been repeated so often that it has become a cliche, yet it is very much true: Maine does not have a revenue problem; it has a spending problem.

Democrats pretend this isn’t true. The way they tell the story, the “LePage tax cuts for the rich” have led to a black hole of money, dropping revenues in Augusta and forcing painful, draconian cuts in everything.

That’s right, actual revenues for fiscal year 2013 are up over those from fiscal year 2012, which were up over those from fiscal year 2011.

So the governor held the line against taxes, actually decreased the rate, and more money is being taken into Augusta? Yes, and that’s not all. During LePage’s stewardship, the unemployment rate has dropped from 8 percent down to 6.9 percent.

Don’t expect Democrats to be able to make sense of this. Indeed, the entire Democratic philosophy on taxes is a jumbled, incoherent mess.

There seems to be no other phrase in the left-of-center bag of tricks besides “tax cuts for the wealthy.” Maine Democrats love to use this phrase to portray the LePage tax reform as some kind of amoral assault on the poor and middle class, in favor of those evil rich fat cats we all despise so much.

In reality, though, the new tax system was a broad-based tax cut bill for all income levels. It eliminated tax payments for 70,000 low-income Mainers who were previously paying taxes. At the same time, the top rate cut of half a percentage point had nothing to do with being rich, given that the top-income tax bracket kicks in at $19,500 a year for individuals and $39,000 for couples.

It is also more than a little comical coming from the Democratic Party, given the tax reform package they passed into law, which was rejected by the voters in 2010. That tax bill lowered the top rate to 6.5 percent for people making under a quarter of a million dollars, and 6.85 percent for those making more. Their package made up for the lost revenue by broadening the sales tax and raising certain parts of it.

So, to a Democrat, half a percent rate cut for the top, while eliminating 70,000 low income Mainers from the tax rolls and not increasing consumption taxes (which hurt the poor more than anyone) while raising state revenues is “irresponsible tax cuts for the wealthy”?

But their big idea three years ago, dropping the top rate by a point and a half and increasing those consumption taxes, is somehow the compassionate, rational plan that is good for the poor and doesn’t help the rich?

You may be seeing now just how clever marketing and repeating a lie long enough can allow an idea as ridiculous as this to permeate the public consciousness.

Proponents of this budget compromise say the tax increases are very small and only temporary. The problem, of course, is two-fold: Little taxes have been adding up in Maine over the course of decades, and looking to bleed Maine taxpayers of more money rather than responsibly manage the budget properly only compounds the problem and punts the football down the field.

At the end of the day, the state budget has certain realities that simply need to be confronted. They were created by Augusta’s inability to address these problems, and Maine finally has a governor who refuses to go along to get along with bad policy.

He should veto.

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About Matthew Gagnon

Matthew Gagnon, of Yarmouth, is the Chief Executive Officer of the Maine Heritage Policy Center, a free market policy think tank based in Portland. Prior to Maine Heritage, he served as a senior strategist for the Republican Governors Association in Washington, D.C. Originally from Hampden, he has been involved with Maine politics for more than a decade.
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Matthew Gagnon

Matthew Gagnon, of Yarmouth, is the Chief Executive Officer of the Maine Heritage Policy Center, a free market policy think tank based in Portland. Prior to Maine Heritage, he served as a senior strategist for the Republican Governors Association in Washington, D.C. Originally from Hampden, he has been involved with Maine politics for more than a decade.